Business leaders, pay your summer interns

A piece of advice to companies hiring interns this summer: Pay them for their work.

Some organizations don’t, claiming that the chance to learn on the job is compensation enough. But not only has this left corporations vulnerable to lawsuits — NBCUniversal, Hearst, Condé Nast, Fox Searchlight Pictures, Warner Music, Coach and Viacom are just a few companies sued by former interns — it’s a foolish human resources strategy.

First, paying interns is clearly the safest legal option. Regardless of the outcome of such legal battles (Hearst was vindicated in December 2017 after a five-year battle, for instance, while Viacom settled for US$7.2 million), paying their interns minimum wage would almost certainly have been cheaper for these companies than the legal battles and bad publicity that not paying them generated.

Unpaid internships also artificially limit a company’s hiring pool. If internships are unpaid, after all, students who have to make money to support themselves can’t do them. This system therefore gives people from more privileged backgrounds an unfair leg up on valuable career experience. Offering internships for credit only is even worse, as it forces students to pay what typically amounts to thousands of dollars to their universities in order to work for free.

Those financial realities stand to put internships outside the realm of possibility for those who aren’t affluent. That’s a huge percentage of students. A recent study of students at more than 60 American universities found that 36 per cent don’t have enough food, and a similar proportion lack adequate shelter. These are not kids who can afford to pay to work.

And pay they must. CNBC calculated last year, for example, that it would cost around US$9,506 to live for the summer in a city such as Los Angeles, and an unpaid intern would forgo about US$3,480 in wages (before taxes) — meaning that an internship can cost US$12,986. Students who are struggling to eat aren’t going to be able to shoulder such costs. This means companies are losing out on their skills.

And after unpaid internships? Then what?

Identifying when an internship becomes exploitation isn't that complicated, and neither is dealing with it

Since many companies go on to hire their interns after graduation — according to the National Association of Colleges and Employers, 67.1 per cent of interns were offered jobs in 2017 — this also means that employers are forgoing chances to test out a lot of potential staffers simply because the students aren’t well off. It’s also in companies’ interests to pay their interns because, in many industries, firms are in hiring wars to attract top talent. Paying interns is a not-terribly-expensive way for companies to establish themselves as great employers among rising stars.

Organizations who don’t pay their interns don’t recruit from a pool of the best possible talent, but rather from the most privileged people seeking to break into their industries. That’s a bad outcome for both sides.